Google Smacks Microsoft In Court

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Google has won the first round in a dispute with Microsoft over a contract for 88,000 workers at the Department of the Interior.

In a ruling unsealed yesterday, a judge ordered the Department to stop deploying Microsoft’s cloud-based email system, known as BPOS-Federal, because it didn’t offer a fair procurement process. Google accused the government of changing the specifications partway through the process so that Microsoft’s system would meet its requirements–but without telling Google about the changes.

This is a win for Google, but the dispute highlights Microsoft’s biggest asset as it tries to defend its huge enterprise software business: pre-existing relationships with big customers. As customers are compelled to renew their existing contracts for software–particularly desktop software like Office–Microsoft can pitch them on its cloud services. Google doesn’t have this kind of leverage.

In the case of federal contracts, the law demands that agencies give Google a fair shake. With private enterprise, there’s no such requirement.

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